20191115IPC to Staff 1-17 - Redacted.pdf

LISA D. NORDSTROM
Lead Counsel
I [e-mail]
i1!CEIVED
l0l9t{0Y l5 PH 2:Otr
November 15,2019
VIA HAND DELIVERY
Diane Hanian, Secretary
ldaho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, ldaho 83714
Re:Case No. IPC-E-19-32
Rate Decrease for Costs Associated with the Boardman Power Plant
ldaho Power Company's Response to the First Production Request of the
Commission Staff
Dear Ms. Hanian:
Enclosed for filing in the above matter are an original and three (3) copies of ldaho
Power Company's Response to the First Production Request of the Commission Staff.
Also enclosed are four (4) copies each of a non-confidential and confidential disk
containing information provided in response to Staffs production requests.
lf you have any questions about the enclosed documents, please do not hesitate to
contact me.
Very truly yours,
42.-
Lisa D. Nordstrom
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Enclosures
an loAcoRP company
LISA D. NORDSTROM (lSB No. 5733)
ldaho Power Company
1221 West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
[e-mail]
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Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION FOR
AUTHORITY TO DECREASE ITS RATES
FOR ELECTRIC SERVICE FOR COSTS
ASSOCIATED WITH THE BOARDMAN
POWER PLANT
CASE NO. IPC-E.19-32
IDAHO POWER COMPANY'S
REDACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF
COMES NOW, ldaho Power Company ("ldaho Power" or "Company"), and in
response to the First Production Request of the Commission Staff to ldaho Power
Company dated November 7,2019, herewith submits the following information:
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE
FIRST PRODUCTION REOUEST OF THE COMI\illSSlON STAFF - 1
REQUEST NO. 1: Please provide all workpapers and Excel digital files, with
formulas intact, used to support Attachment 1 of the Application.
RESPONSE TO REQUEST NO. 1: Please see the Excel file attachment which
includes the associated workpapers in digital format, with formulas intact, provided on
the nonconfidential CD.
The response to this Request is sponsored by Matthew T. Larkin, Revenue
Requirement Senior Manager, ldaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE
FIRST PRODUCTION REOUEST OF THE COMMISSION STAFF . 2
REQUEST NO. 2: Please provide all workpapers and Excel digital files, with
formulas intact, used to support Exhibit No. 1 and 2 of Larkin, Dl Testimony.
RESPONSE TO REQUEST NO. 2: Please see the Excel file attachment for
Exhibit Nos. 1 and 2, with the associated workpapers, in digital format, with formulas
intact, provided on the nonconfidential CD,
The response to this Request is sponsored by Matthew T. Larkin, Revenue
Requirement Senior Manager, ldaho Power Company,
IDAHO POWER COIVIPANY'S REOACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COMIVIISSION STAFF - 3
REQUEST NO. 3: Pease provide all documentation since 2012 between the
Company and its partner, Portland General Electric (PGE), showing how the Company
actively engaged with PGE to minimize costs attributed to plant investments in relation
to the forecasted amounts filed in 2012. These documents would likely question the
need for an upgrade and/or likewise explore potential alternatives for minimizing cost,
especially given the plant's short remaining life.
RESPONSE TO REQUEST NO. 3: Please see the response to Staffs Request
No. 4 below for a description of ldaho Power's engagement in Boardman plant meetings
where discussions regarding capital investments were had. A copy of the meeting
notes from these meetings are available for review at the Company's headquarters.
Please contact Tami White at [phone] to schedule a time to review the
requested information.
The response to this Request is sponsored by John Carstensen, Joint Projects
Leader, ldaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 4
REQUEST NO. 4: Please provide guidelines and procedures used by the
Boardman plant (ldaho Power Company/Portland General Electric) to develop and
complete project capital investments at the plant.
RESPONSE TO REQUEST NO. 4:ln general, PGE, as the operator of
Boardman, manages the capital budget in total for a year, vetting and analyzing the
need for capital replacements specifically as they arise and for those required to
continue to provide reliable and safe operation of the plant. As only a 10 percent owner
in the plant, ldaho Power has contractual limitations on its influence over the capital
replacements if the Company has disagreements as to capital spend. However, it
should be noted that ldaho Power is actively involved in the decision-making process in
all matters associated with capital investments and provides input that influences
decision-making at the time. ln addition, since a Boardman cessation of coal-fired
operations date was established, the actual capital spend at the plant has consistently
come in under planned capital amounts, suggesting prudent capital investment
decision-making.
There are two types of meetings in which potential capital investments at
Boardman are discussed: Asset Management Plan ('AMP) meetings and Ownership
Meetings. AMP meetings are held with PGE corporate personnel and the Boardman
plant personnel to discuss upcoming capital projects identified by corporate and plant
engineering personnel. The AMP meetings, which generally occur on an annual basis,
are attended by PGE corporate personnel, Boardman plant management and staff, and
ldaho Power representatives. The AMP meetings include a discussion of future capital
and operations and maintenance ("O&M") expense projects for the plant. Anyone in
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COI\4MISSION STAFF - 5
attendance c€ln ask questions regarding any aspect of the projects, including
justification, timing, and costs. Similarly, capital and O&M projects, both actual and
forecasted, may be discussed during each Ownership Meeting, which occurs annually
at a minimum.
For the last few years, considering the limited remaining operating life, the
Boardman capital plan has been a series of blankets and/or contingency projects rather
than specifically identified "planned" projects. lf and when a capital issue arises,
typically to address equipment failures, the plant will write a new budget lD and work
order for the capital investment.
Finally, the contractual dispute process defined in the Agreement for
Construction, Ownership and Operation of the Number One Boardman Station on Carty
Reservoir dated October 15, 1976, as amended ("Boardman Agreement"), allows for
use by ldaho Power of a Project Consultant to determine Prudent Utility Practice of
capital investments.
The response to this Request is sponsored by John Carstensen, Joint Projects
Leader, ldaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COIUMISSION STAFF - 6
REQUEST NO.5: For project "27300604 BOARDMAN 24806 EXPAND
SHOP & WAREHOUSE" identified in accounting year 2013, please provide the
following:
a. Analysis used to support the capital investment.
b. Request developed for bidder proposals.
c. Projectconstructiondocumentationincluding:
i. Construction contract
ii. Scope document
iii. Organizationalchart
iv. Schedule (baseline versus actual)
v. Monthly project status reports
vi. Action items list(s)
vii. Contractor change order requests
NOTE: Where requested information has not been provided, please explain why
it was not provided and further how the Company assured the construction of the
project at a least cost.
RESPONSE TO REQUEST NO. 5:ldaho Power's share of the Boardman shop
expansion and warehouse project cost was approximately $200,000. The shop
provides needed work space for equipment repair and overhaul, and allows plant
personnel to perform the necessary maintenance activities to ensure that the plant
remains operational through the remaining life of the plant. The shop expansion allows
for overhaul of large equipment to occur in the shop rather than in the turbine deck and
crane bay as previously performed. When the turbine deck and crane bay was utilized
IDAHO POWER COMPANY'S REDACTEO RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 7
for such work, it created communication issues, impeded emergency egress, and the
welding activities set off the smoke and fire alarms. ln addition, prior to the expansion,
the weld shop was undersized and had inadequate ventilation and separation from the
rest of the maintenance shop. The expansion provided a safer working environment, as
well as more efficient working space for the Boardman maintenance crews.
ldaho Power has contacted PGE for the requested information and was informed
it will be compiled and available to the Company the week of November 18, 2019. Due
to the confidential nature of the documents, ldaho Power respectfully requests
Commission Staff come on-site to review the closure planning guidance. Please
contact Tami White at [phone] to arrange a time to review the requested
material.
The response to this Request is sponsored by John Carstensen, Joint Projects
Leader, ldaho Power Company.
IDAHO POWER COIVIPANY'S REDACTEO RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF .8
REQUEST NO. 6: For project 27363452 BOARDMAN 1-1760 SO2
CONTROLS MODIFICATION BART identified in accounting year 2014, please
provide the following:
d. Analysis used to support the capital investment.
e. Request developed for bidder proposals.
f. Projectconstructiondocumentationincluding:
i. Construction contract
ii. Scope document
iii. Organizationalchart
iv. Schedule (baseline versus actual)
v. Monthly project status reports
vi. Action items list(s)
vii. Contractor change order requests
NOTE: Where requested information has not been provided, please explain why
it was not provided and further how the Company assured the construction of the
project at a least cost.
RESPONSE TO REQUIST NO. 6: ldaho Poweis share of the Boardman Sulfur
Dioxide (.SO2') Controls project cost was approximately $500,000. Through the Best
Available Retrofit Technology ( BART') rulemaking process, the Oregon Regional Haze
State lmplementation Plan (,'RHSIP'), and per the Oregon Department of Environmental
Quality Title V Operating permit and Acid Rain permit, SO2 emissions must be
controlled and monitored. This project resulted in the addition of a dry sorbent injection
system to control sulfur emissions from Boardman, as required by BART and the
IDAHO POWER COIVIPANY'S REDACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COMIVISSION STAFF - 9
Oregon RHSIP. ldaho Power has contacted PGE for the requested information and
was informed it will be compiled and available to the Company the week of November
18, 2019. Due to the confidential nature of the documents, ldaho Power respectfully
requests Commission Staff come on-site to review the closure planning guidance.
Please contact Tami White at [phone] to arrange a time to review the requested
material.
The response to this Request is sponsored by John Carstensen, Joint Projects
Leader, ldaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF . 1O
REQUEST NO. 7:Please provide the Company's analysis and explain the
reasoning for the sale of assets under the APA in year 2014lo Portland General Electric
(PGE). Further, please identify all assets sold under this agreement.
RESPONSE TO REQUEST NO.7: As explained in the conveyance notification
provided to the Commission on August 19,2014, and provided as an attachment on the
nonconfidential CD, ldaho Power and PGE are owners and parties to the Boardman
Agreement. The Boardman Agreement provides that one or more of the owners may
construct additional generation projects at the Boardman site. ln such case, the owners
are required to grant to the constructing owner, among other things, a partial ownership
interest in certain facilities at Boardman that may be used in common for the operations
of Boardman and the new generating project ("Shared Facilities"). Under the Boardman
Agreement, the Shared Facilities may include such items as the project reservoir,
pumping facilities, pipelines, roads, railroad spurs, docks, parking lots, fencing, and
transmission facilities
ln 2014, the owners entered into an Asset Purchase Agreement ("APA") dated
April 14, 2014, for conveyance of interest in Shared Facilities to PGE for use at their
new natural-gas fired generation project on the Carty Reservoir ("Carty") Under the
APA, PGE purchased a 50 percent ownership interest in the Shared Facilities and
payment was based upon the Carty project's expected usage percentage and the
agreed upon asset value as summarized below:
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 11
Asset Description Allocable Share
Payable to ldaho Power
Shared Facilities:
Carty Reservoir $ 489,365
Columbia River lntake $ 40,580
Existing Water lntake Structure $ 745
Potable Water System $ 12,295
Tower Road Riqhts $ 22,245
Wastewater Ponds $ 12,325
Communications Equipment & Housing $ 42,580
Plant Real Property Easement $70
Total $ 620,20s
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 12
ldaho Power's conveyance of the Shared Facilities to PGE did not adversely
affect the continued use of the Shared Facilities at Boardman or ldaho Power's existing
rights to the output and capacity at Boardman, including use of the connecting
transmission lines. The Company received fair compensation of $620,205 for a
conveyance that reduced ldaho Power's depreciation expense and decommissioning
costs because (1) the Company's ownership interest in the Shared Facilities was
reduced, and (2) the Shared Facilities would not need to be fully depreciated and
decommissioned as otherwise planned for the 2020 shutdown of the Boardman plant,
due to their continued use at Carty. The purchase price associated with the Shared
Facilities at Boardman resulted in a gain of $264,060 on a total system basis, or
$251 ,077 on an ldaho jurisdictional basis. The customer benefit associated with the
gain is reflected in the levelized revenue requirement computation on the Conveyance
of Shared Facilities Gain line of Exhibit No, 1 while the reduction of $356,145 to the
plant balances is reflected as a reduction to the 2014 incremental investments.
The response to this Request is sponsored by Randy Henderson, Principal Joint
Projects Coordinator, ldaho Power Company.
REQUEST NO. 8: Please explain the current requirements for renovation of the
ash field. Please explain any differences in costs or requirements relative to the
requirements expected in 2012.
RESPONSE TO REQUEST NO. 8:ln compliance with the existing Coal
Combustion Residuals rule, PGE plans to cap the ash landfill in place and not dispose
of any ash elsewhere. ln the Confidential Updated Boardman Coal Plant
Decommissioning and Demolition Plan dated October 16,2019, that the Company is
providing in Response to Staffls Request No. 17, the estimated cost of the disposal area
closure rs $7.18 million as compared to the $7.05 million previously estimated. The
2019 study assumes closure of the disposal area with no ash reclamation and 30 years
of groundwater monitoring and O&M. Please note, ldaho Power's request in this case
does not include an update to the decommissioning costs as the 2019 study was not
available at the time of filing.
The response to this Request is sponsored by John Carstensen, Joint Projects
Leader, ldaho Power Company.
IDAHO POWER COIVIPANY'S REOACTED RESPONSE TO THE
FIRST PRODUCTION REOUEST OF THE COMMISSION STAFF - 13
REQUEST NO. 9: Please explain the current Boardman plant approach for
disposing of any remaining coal on site at the end of 2020. When the plant is closed,
will any remaining coal on site be required to be landfilled? lf so, please explain why
and quantify the cost.
RESPONSE TO REQUEST NO. 9:ldaho Power and PGE are carefully
coordinating coal deliveries and managing inventories to minimize the risk of any coal
remaining unburned at the end of 2020. There is coal at the base of the existing coal
pile that will need to be recovered (separated from the dirt). The partners are currently
planning on bringing a contractor on-site in 2020 to start the recovery process of the
coal, which, in turn, will be burned in the boiler. Any coal that cannot be recovered will
be transported and disposed of at a landfill. Considering data from PGE's on-site
biomass disposal efforts, ldaho Power estimates that the disposal of any unrecoverable
coal would cost approximately
The response to this Request is sponsored by John Carstensen, Joint Projects
Leader, ldaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 14
REQUEST NO. 10: ln reference to the Boardman Balancin g Account, please
provide an Excel spreadsheet with work orders and/or project numbers for the
Boardman additions that have closed to plant in service from January 1, 2017 through
December 31, 2018 or have been included in the balancing account during that same
time period. Please provide copies of all work orders and all supporting documentation
for the actual capital investments for 2O17 and 2018.
RESPONSE TO REQUEST NO. 10: Please see the "2018 Adds" tab in the
attachment provided in response to Staffs Request No. 2 for a list of all Boardman
additions that have closed to electric plant in service from January 1, 2017 , through
December 31 , 2018. The work order numbers are identified in the column titled
"Project". Please see the Company's Response to Staffls Request No. 15 for the
supporting documentation for the actual capital investments for 2017 and 2018.
The response to this Request is sponsored by Randy Henderson, Principal Joint
Projects Coordinator, ldaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 15
REQUEST NO. 11: Please provide the Audit Reports from the external auditor
for the Boardman Trust for the years 2016 through 2019
RESPONSE TO REQUEST NO. 11: The annual external auditor report on the
Boardman Trust was suspended after the 2014 calendar year because it was
determined it was not a cost-effective approach. Prior year reports found no material
errors or misstatements, and no findings were made regarding the reasonableness and
validity of ldaho Power's share of the costs at the Boardman plant. Although the
contractual requirement that a third-party audit of the Boardman Trust be commissioned
annually has been suspended, ldaho Power retains the right to request that PGE
commission a third-party audit by providing a 90-day written notice prior to the end of
the calendar year.
The response to this Request is sponsored by Randy Henderson, Principal Joint
Projects Coordinator, ldaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF . 16
REQUEST NO. 12: ln reference to the Boardman Balancing Account, please
provide the forecast and budget documents prepared by Portland General Electric for
the Boardman plant for the years 2012 through 2020. ln addition, please provide the
calculation and supporting documentation for the ''adder" that ldaho Power includes in
the calculation of the actual and forecast for the Boardman Balancing account.
RESPONSE TO REQUEST NO. 12: Please see the confidential Excel file
attachment for the Boardman forecast and budget documents prepared by PGE in the
years 2013 through 2019, including the capital loadings or "adders" where appropriate.
ldaho Power has not retained budget documentation pertaining to the 2012 budget year
in the ordinary course of business.
The response to this Request is sponsored by Randy Henderson, Principal Joint
Projects Coordinator, ldaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF . 17
REQUEST NO. 13: ln reference to the Boardman Balancing Account, please
provide the underlying supporting information (actual kWhs sold or other similar
documentation used) for the actual revenue true up collections for 2017 and 2018.
RE N ET RE T NO. 13: Please see Exhibit No. 2 to the direct
testimony of Mr. Larkin for the actual kilowatlhours sold by month and used to calculate
the actual revenue true up collections for 2017 and 2018.
The response to this Request is sponsored by Matthew T. Larkin, Revenue
Requirement Senior Manager, ldaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 18
REQUEST NO. 14: Please provide any internal audit reports and supporting
workpapers for the Boardman facility. ln addition, please provide any Sarbanes-Oxley
results that pertain to the Boardman facility.
RESPONSE TO REQUEST NO. 14: Due to the nature of the documents , ldaho
Power respectfully requests Commission Staff come on-site to review the internal audit
reports and SOX results specific to the Boardman plant. Please contact Tami White at
[phone] to arrange a time to review the requested material.
The response to this Request is sponsored by Sonse Sutezzo, Operations Audit
Manager, ldaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 19
REQUEST NO. 15: Please provide copies of Boardman Capital lnvestment
Source Documents for the period from June 2012 through December 201 8 for onsite
revtew
RESPONSE TO REOUEST NO. 15: Please see the "2018 Adds'' tab in the
workpapers provided in response to Staffs Request No.2 for a list of all Boardman
additions that have closed to electric plant in service from June 1, 2012, through
December 31, 2018. ldaho Power's work order jackets include invoices from PGE that
support the plant additions. Due to the voluminous nature of the material, ldaho Power
respectfully requests that Staff review the work order jackets of the work orders
referenced in the attachment and identify the specific invoices for which they would like
documentation.
The response to this Request is sponsored by Randy Henderson, Principal Joint
Projects Coordinator, ldaho Power Company.
IDAHO POWER COI\4PANY'S REDACTED RESPONSE TO THE
FIRST PRODUCTION REOUEST OF THE COMMISSION STAFF - 20
REQUEST NO. 15: Please provide project description, costs, and dates for
unplanned investments or those investments that weren't included in the |ast "projected
additions" to the Boardman plant through December 31 , 2018.
TRESPONS RE UE T NO. 16: Attached is a summary report prepared by
PGE that shows the projects that were included as part of a forecasUbudget as
compared to actual capital spend, by project, that ldaho Power was billed. Amounts are
reflected at the plant level cost, or 100 percent share.
Because this report is directly from the operating partner, actual capital spend
amounts will not tie in total to the actuals included in a specific year's closing amount
used to model the incremental revenue requirement as provided in the response to
Staffls Request No, 2. This is due to the fact that each Company's Allowance for Funds
Used During Construction accrual rates are different, and capital amounts recorded by
ldaho Power incur a one-month lag, which therefore results in different in-service dates
for the two partners.
This report highlights the capital projects that arose since 2012 for which a
specafic budget line item was not created. Please note, 2012 amounts represent budget
and project spend amounts for the entire calendar year 2012, rather than the June 1
through December 31 ,2012, time period used in the incremental revenue requirement
calculation in this case.
The response to this Request is sponsored by Randy Henderson, Principal Joint
Projects Coordinator, ldaho Power Company.
IDAHO POWER COMPANY'S REDACTEO RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF .21
REQUEST NO. 17: Please provide a copy of the report prepared by CH2M Hill
in 2015 for the decommissioning, demolition, and final closure plan for Boardman. ln
addition, Matt Larkin's testimony on page 16 refers to a request for proposal by Portland
General Electric "seeking an owner's engineer to complete design and permitting work
in preparation for decommissioning activities in 2019..." Please provide a copy of this
updated decommissioning cost study when it becomes available.
RESPONSE TO REQUEST NO. 17: Please see Confidential Attachment 1
Updated Boardman Coal Plant Decommissioning and Demolition Plan dated October
16,2019, prepared by AECOM for the updated decommissioning cost study, and
Confidential Attachment 2, Decommissioning and Demolition Plan for the Boardman
Power Plant prepared by CH2M Hill. Please note, ldaho Power's request in this case
does not include an update to the decommissioning costs as the 2019 study was not
available at the time of filing.
The response to this Request is sponsored by John Carstensen, Joint Projects
Leader, ldaho Power Company.
DATED at Boise, ldaho, this 1 5th day of November 2019.
D. NORDST OM
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF .22
LI
Attorney for ldaho Power Company
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 15th day of November 2019 I served a true and
correct copy of IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF upon the following
named parties by the method indicated below, and addressed to the following:
Commission Staff
Edward Jewell
Deputy Attorney General
ldaho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, ldaho 83714
X Hand Delivered
_U.S. Mail
_Overnight Mail
-FAXX Email [e-mail]
6
Ki rly Towell utive Assistant
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF .23